A pick up in house prices is one of the things that could tempt Chartis back into writing new solicitors’ professional indemnity, said vice president of financial lines Steve Bonnington.
Bonnington, speaking after this week’s official announcement to stop writing new business and concentrate on renewals, said: “There is a heavy degree of correlation between the experience of our solicitors’ portfolio and the performance of the housing market in the UK.”
“If a solicitor makes a mistake, it’s very important, but the economic impact would be lessened if the housing market was performing better.”
Chartis would also need changes to the Qualifying Insurers’ Agreement allowing policies to be cancelled for non-payment and giving greater flexibility around claims from lenders, he said.
A healthier global economy, a better claims experience and the scrapping of the assigned risks pool (ARP) would also improve the prospects of a return, Bonnington said.
Finally, the use of minimisation techniques was also a factor for Chartis deciding not to write new solicitors’ PI business for this year’s renewal, Bonnington said.
Insurance Times understands these techniques were used extensively by some insurers at the 2010 renewal to under-declare premiums, giving them a reduced bill for associated ARP costs.
Chartis was the biggest insurer in solicitors' PI last year. It wrote £38.5m of business and had an 18% market share.
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